T2 Biosystems (TTOO) has announced that the U.S. Food and Drug Administration (FDA) has issued Emergency Use Authorization (EUA) for its COVID-19 molecular diagnostic test, the T2SARS-CoV-2 Panel. Shares surged 19% in after-hours trading on the news.
TTOO’s molecular diagnostic test detects the COVID-19 virus, SARS-CoV-2, and provides results in under two hours using a nasopharyngeal swab sample. It runs on the company’s fully-automated T2Dx Instrument, which can carry out seven tests simultaneously.
Clinical testing on both positive and negative patient samples demonstrated a sensitivity of 95% and specificity of 100%, says the company.
“We believe the Emergency Use Authorization for our COVID-19 molecular diagnostic test will lead to greater adoption of our technology by U.S. hospitals, and we are expanding manufacturing capacity to meet the anticipated demand,” said John Sperzel, CEO of T2 Biosystems.
“As critically-ill COVID-19 patients are susceptible to bacterial or fungal co-infections and secondary infections that can lead to sepsis, we believe our platform can be an effective tool to identify acute COVID-19 infections, and optimize outcomes for hospitalized patients under intensive care” he continued.
Year-to-date shares in T2 Biosystems have surged 34%, and the Street has a bullish Strong Buy consensus on the stock’s outlook. That’s with an average analyst price target of $3.50- indicating shares can more than double from current levels.
“We continue to see COVID-19 as a game-changing event for infectious disease companies, with disproportionate benefits being realized by smaller diagnostics companies with high-performing COVID-19 testing capabilities. We include T2 on this list, and believe the company has set reasonable goals to execute against in 2H’20” cheered Canaccord Genuity analyst Max Masucci on August 12.
He has a buy rating on the stock with a $4 price target (156% upside potential), and notes that T2 has now reinstated full year 2020 guidance with top-line revenues of $18-20M (+128% Y/Y at midpoint). (See TTOO stock analysis on TipRanks).
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